E-Tailers See the Error of their Ways
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The Internet companies that recently agreed to settle Federal Trade Commission charges that they gave inadequate notice of shipping delays, or assuring delivery dates when fulfillment was impossible last holiday season, promise to have procedures in place to avoid such catastrophes this year.

CDnow, Kbkids.com, Macys.com, Franklin W. Bishop Minidiscnow.com, The Original Honey Baked Ham Company of Georgia, Patriot Computer and Toysrus.com have agreed to change procedures and pay penalties ranging from $45,000 to $350,000 and totaling $1.5 million. In addition, Macy's is required to fund an Internet consumer campaign about the Mail and Telephone Order Rule.

The rule requires that retailers ship merchandise within the date promised, or if no date is given, within 30 days after the order was received. And if the company cannot ship, it is required to provide notice to the buyer with a revised shipping date.

Some of the aforementioned e-tailers failed to send delay option notices and made shipping representations without a reasonable basis. The FTC mandated the companies to file compliance reports and to demonstrate that procedures are in place to comply with the Rule.

After experiencing last year's most infamous e-fulfillment disaster, Toysrus.com has chosen i2 Technologies and Siebel to implement solutions to enhance turn around and accuracy, with the hope of not replicating 1999's missteps. i2's TradeMatric software will help give customers up-to-date information about their order status, and its global logistics manager will provide a track-and-trace functionality to provide real-time alerts.

Siebel will deploy the Toysrus.com call center, as well as e-mail response; and Siebel eService applications will create a single customer information management system, to help Toysrus.com respond more accurately and quickly. Carol Sanger, vice president of corporate communications for Macys.com, says the online department store has yet to submit a proposal for the consumer education program.

The company has enhanced its internal merchandising system through software provided by Federated Systems Group, which also deploys its IT systems support. Now Macy's can have a real-time handle on in-stock inventory so that agents can let customers know immediately when shipments will arrive.

"For us, this is a priority in providing the level of customer service that we believe is necessary and that our customers have a right to expect," Sanger says.

Despite some companies' claims that they upgraded their systems, Adam Sarner, a CRM analyst at Gartner, says he believes this holiday season will fare even worse than last year's. "The Internet is still a pain in the ass to use," Sarner remarked. "Until it's not, it will lose its luster."

Sarner says many companies still don't have multichannel systems in place to handle customer interaction because of either an unwillingness to pay for the infrastructure or the lack of software capabilities. "There is no software out there that goes all the way back to the supply chain," Sarner says. "It's a long process, and we're in the infancy phase." Sarner believes this season will produce even worse scenarios than last year because there are more people online and the people who were online last year have higher expectations.

After Sales Help
Revbox, a company that handles post purchasing activities by selling e-tailers online extended service plans, repair contracts, rebate processing and PC installation support, will help to free up customer service time during the holiday season, according to Michael Cummings, vice president of marketing for Revbox.

"It's become apparent that consumers needed help on the backend and Revbox realized there was a tremendous amount of post-purchase activity. Statistics indicate a real need to take care of customers at the point of sale and after the purchase," Cummings says.

Revbox helps to deal with these infrastructure issues at both those points. "We power online and offline retailers and build customer loyalty and reduce costs." E-commerce application provider Global Mart signed on to use Revbox this year, and although it claims its 1999 holiday season went off without any hitches, it anticipates an even easier one this year.

"We're able to handle the big volume, but we think Revbox will really help us with customer service issues," says Bret Peterson, president and CEO of Global Mart. Peterson says just a couple years ago, customers asked for extended warranties and Global Mart's customer service had to mail them forms, which the customers had to complete and mail back. "That they're now able to pick up warranty information on the Internet will give them peace of mind."

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